Sales of newly built single-family homes inched up by 0.7 percent from July to August, to a seasonally adjusted annual rate of 429,000 — a 3.4 percent slowdown from a year ago, the Census Bureau said.
The month-over-month gain was less than expected by some analysts, but the boost in sales — along with the slower pace of construction of new homes — helped builders trim inventories.
The 262,000 new homes on the market at the end of August represented 7.3 months of supply, down from 7.6 months in July and a peak for the year of 12.4 months in January. A six-month supply of homes is generally considered an even balance between supply and demand.
August marked the fifth month in a row that Census Bureau numbers showed sales of new homes increasing and inventories decreasing from month-to-month.
While homebuilders fear much of the increase in sales is driven by a federal tax credit for first-time homebuyers that is set to expire Nov. 30 (see story), low interest rates and falling prices have also been cited as factors.
The median price of a new home fell 9.5 percent from July to August, to $195,200 — the first time it’s dipped below $200,000 since the downturn began. The median price of a new home averaged $247,900 in 2007 and was $221,000 a year ago.
At 12.9 months, the median number of months a new home was for sale after completion was up from nine months a year ago and 6.2 months in 2007.
Production of new single-family homes declined 3 percent from July to August, to a seasonally adjusted rate of 479,000 units a year, ending five months of consecutive growth in single-family starts, the Census Bureau said last week. In comparison, builders started construction on 622,000 single-family homes in 2008 and 1.046 million homes in 2007.
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